New Year, new hopes?

As everyone returns to work after the holiday period, it is firstly appropriate to wish everyone a Happy New Year, but also a natural time to think about what that year may bring for us all.  From a business perspective, some things seem to be known now.  Manufacturers are pushing forward with electrification to meet the imminent emissions regulations, but cutting back in other areas, including mobility investments and their own staff overhead, to meet the bill.  Suppliers face mixed fortunes depending on their area of focus – high technology generally positive, commodities and IC-specific more threatened through volumes and more price pressure.  Dealers are beginning to develop their positions for the forthcoming BER review, and are worrying about the impact on them of mix targets and bonuses which will enable the manufacturers to meet their emissions targets.

Against this background, we at ICDP see some interesting points which might be leading indicators for the year ahead, and potentially the next decade as we enter the 2020s.  We had some concerns that memberships might come under pressure due to budget cuts, but we are currently adding members rather than losing them, including some old friends who we have not see for a while.  We have an all-time record capacity crowd for the ‘clean slate’ network workshop next week, with broad representation from manufacturers, dealers, their associations and suppliers to the downstream sector.  We have also had some discussions about possible consulting assignments to take the ‘clean slate’ concept and to consider how it might apply to specific brands and markets.  We are also in the final editing stages of the Aftermarket of Tomorrow report where the complexities of the market have extended our publishing deadlines, but we hope members will feel that the wait was worthwhile when it breaks cover in a few weeks.

As a natural optimist, this all makes me feel that change in distribution is now finally seen as a ‘must do’ – something that cannot be deferred for better times, but which in its own way is as important as the other ring-fenced items in company budgets.  This would be good news indeed, as the scale of change – whether following our Dealer of Tomorrow pragmatic approach or the more radical ‘clean slate’ approach – is such that implementation is a multi-year task, and although it can be staged, there needs to be a consistent path that all players can follow with confidence.  If we as an industry fail to do this, then it leaves the door open for e-commerce players and other disruptors to continue to make money from the weaknesses in the current business model, and in doing so, weaken it still further through lost margin and dislocation of existing customer relationships.  That will make it even more difficult to embark on the needed transformation from a stable foundation.

Here’s hoping that the first signs are truly a reflection of what is to come, and brace ourselves for an exciting ride!